The following clarification was printed in the Guardian's Corrections and clarifications column, Wednesday 19 August 2009

The article below about a missing cargo ship referred to the Dover straits and the straits of Gibraltar. Guardian style is strait, singular.

While their Kalashnikov-armed modern peers are running riot off the Horn of Africa, pirates have been absent from the coasts of Europe for hundreds of years. Now, however, coastguards are investigating what could be the continent's first significant case of maritime piracy in living memory.

The mystery surrounds the Arctic Sea, a 98-metre Russian-crewed cargo ship that set off from Finland on 23 July carrying timber worth about £1m, bound for the Algerian port of Bejaia.

In the early hours of the next morning, in the Baltic Sea near the Swedish island of Oland, the ship was boarded by up to 10 armed men dressed in police uniforms, according to reports from the Russian news agency Tass.

The raiders tied up the crew as they searched the vessel and stole a few items, including a satellite phone, before leaving in their rubber dingy. Three crew members were reportedly injured. Curiously, the attack did not seem to be reported immediately, and only emerged 10 days later when Interpol issued an alert.

By this time the Maltese-registered ship had vanished. Its last confirmed contact with the outside world came just before 3pm UK time on 29 July, when it radioed British coastguards to say it was in the Dover straits and heading for Algeria. Signals from the ship's automatic identification system (AIS) beacon confirmed the position.

"That's all they said – where they were and where they were going," said Mark Clark, of the Maritime and Coastguard Agency. "They didn't mention anything about having been boarded or hijacked, which would seem a bit curious. If they had been tied up by pirates you'd have thought they might have mentioned it."

According to websites that monitor live AIS signals, the Arctic Sea, built in 1992 and owned by a Finnish company, disappeared from tracking systems in the early hours of 30 July off the northern French port of Brest. This did not necessarily mean the system was turned off, as tracking coverage can be patchy. The ship was later spotted by a patrol aircraft off the Portuguese coast, Clark said.

And then, nothing – the ship and its crew seemingly disappeared into thin air. The vessel was due at Bejaia more than a week ago, but never arrived. Spanish reports say it was never seen passing the Straits of Gibraltar, meaning it could have been taken down the west coast of Africa.

The Russian navy has sent ships from its Black Sea fleet to the Atlantic to hunt for the Arctic Sea, according to the country's defence ministry, while Portugal is carrying out its own search.

"We don't know what has happened, but it is possible the ship was attacked by pirates," said a spokesman at the Maritime Rescue Co-ordination Centre in Lisbon. "We are searching with planes and boats, but so far there is no sign of it."

The call to British coastguards was a mystery, Clark said. "It seems possible that the hijackers could still be on board. Even if they are not, at the very least a large ship has apparently gone missing, which is unusual enough. It is possible that the person who spoke was either a pirate or a member of the crew speaking under duress."

Inevitably, a number of alternative theories have sprung up, including the notion that criminal gangs or someone connected to the crew had been smuggling drugs or another illegal consignment amid the timber. Russian maritime officials have dismissed any notion of crew complicity, saying those on board were experienced and trusted.

If the case does turn out to be piracy, it would be an unprecedented situation, according to Jeremy Harrison, from the UK's Chamber of Shipping. "It's extraordinary. This just doesn't happen. These are heavily patrolled waters," he said.

If boarders had turned off the AIS signal, finding the vessel could prove hard, Harrison added. "It can take a long time even to find boats in trouble, even when the general location is known. If the vessel is still afloat and is trying to hide – well, it's a big ocean."